For the 3rd year in a row, students report that their biggest concern about getting their degree is the level of debt they’ll have to take on. According to the 2015 College Hopes & Worries Report, 39% of students claim debt is their biggest concern. The 2nd biggest worry for students was that they would get into their first-choice college, but won’t have sufficient funds or aid to attend.
Considering the top dream schools for both students and parents include names such as Stanford, Harvard, NYU, Columbia, Yale, MIT, UCLA, Princeton and Cornell, it’s no wonder that students are so worried about costs. However, what they should worry about more is their likelihood of getting into those colleges in the first place.
What's Wrong with These Dream Schools?
The colleges in the top 10 “dream” school list all have extremely low acceptance rates. Many of these schools accept fewer than 10% of applicants.
Unless the student who is applying to one of these dream schools is in their top of their class and has some other outstanding characteristics, it is unlikely that they will get accepted. Students who are able to barely squeak in will generally not be awarded as much merit aid as those who are academic powerhouses.
Even schools that pledge to meet the full need of students will include loans in their financial aid offer. The truth is if a college really wants a student, they will offer generous aid. Students who receive great financial aid packages are usually those in the top 30% of applicants.
Is It Worth the Money?
Many students become so attached to the idea of their dream school they'll want to attend even if they receive a measly financial aid package. They reason that it's worth the debt to go to NYU or some other prestigious university just because of the advantages of name-recognition and networking, but is this true?
Studies have also shown that that students who apply to ivy-league schools, but end up attending somewhere else do just as well as those who attended and graduate from ivy-league schools. Very bright students can succeed just as well (or sometimes better) at a school that is a better fit financially or socially, or whatever it is that is important to them, as they can at an ultra-competitive and often expensive prestigious school.
There is an exception to the rule, as the same study found that minority or low-income students were found to receive a boost from attending an ivy-league school, as it may open up opportunities to them they would not have otherwise had. Minorities and low-income students also typically receive more financial aid than other students (though not always), so they may not have to worry as much about debt.
The class of 2015 is the most indebted graduating class ever with an average student debt burden of $35,000. There's every reason to expect that the class of 2016 will surpass that number. Debt can hold graduates back from achieving financial milestones such as owning their own home, as well as force them to take jobs that supply a steady paycheck instead of following their dreams of starting a business, traveling or volunteering.
Your education can be affordable, all it takes is making the right decisions all the way from the initial application process, to acceptance of your financial aid package. Graduate without debt holding you back, and you'll be in a position to make the most of your education.
Could you refinance your loans? Compare personalized offers from multiple lenders in minutes with Credible.